As Q1 of 2014 comes to an end, we can see that January was extremely weak, February gained it all back, and March treaded water. At this point, as we head into what has been the strongest month of the year over the past 20 years, signals are mixed, with a steadily recovering economy and bullish fundamental indicators mixed with neutral technical and some bearish sentiment indicators.

Today was another surprise Monday.  Short sellers who thought a rough weekend in Ukraine might stir up the war drums again were wrong.  In addition, China took several steps to boost its economy, and the domestic economic reports were fairly positive.  As a result, the shorts capitulated at the opening and risk was on.  The day ended led by the DJI (every stock was positive!), up more than 1%, with the S&P 500 up nearly 1% and the NASDAQ up about 0.8%

Today was the beginning of “spring break” for the market.  At least it seemed that way with a very low trading volume of only 600M shares on the NYSE.  Either the college crowd does more trading than we imagined or parents are taking the week off as well.

Today brought three better than expected economic releases from Construction Spending, ISM Manufacturing, and Personal Income. The ISM figure was quite unexpected and Personal Income was well above expectations.  If we ignore for a moment that the Final GDP reading for Q4 was lowered on Friday (which may or may not have been primarily caused by severe weather), we have had a week of better than expected economic numbers.